The central bank managed to do that without increasing its asset purchases–the main element of its monetary easing–something that Mr. Kuroda likened to putting on “better tires” on a car with a “powerful engine.”

But some BOJ watchers question how effective the revised loan programs will be once the initial market euphoria subsides.

Here are some points raised by the skeptics:

1. Deadlines for the existing programs were already approaching.
Both loan programs were expected to be extended anyway as they were both due to expire at the end of March, with one nearing its ceiling on the amount of loans. While the size of the expansion and the fact that it didn’t wait until next month caught many by surprise, the BOJ extending the program is hardly astonishing.

2. Do commercial banks even need or want to borrow money from the BOJ?
The combined amount of BOJ loans that private banks have used as of Feb. 10 stood at around Y9 trillion, falling short of the BOJ’s target of Y13 trillion at the end of last year. With the BOJ’s current lending rates already close to zero and Japanese commercial lenders already flush with cash, it may be the case that the country’s lenders may not be interested in borrowing money, especially if there are strings attached.

3. No immediate change to monetary base.
The BOJ had already set a target of increasing the monetary base, or the money circulating in the banking system, to Y270 trillion by the end of this year. That is a key pillar of its strategy of flooding the economy with cash to achieve 2% inflation. Of the Y270 trillion, Y18 trillion in loans from the two programs have been factored in, meaning that the expansion today is within the parameters of that framework and not an increase in the monetary base.

And here are the main points of the changes to the two programs:

1. Stimulating bank lending facility:
This program, similar to funding for lending adopted by the Bank of England, was introduced in December 2012 under former Gov. Masaaki Shirakawa. It provides funds to private banks in return for an increase in their loans outstanding. On Tuesday, the BOJ decided to offer loans to each bank to double the amount of net increases in their lending outstanding.

2. Growth-supporting funding facility:
This program was also introduced under Mr. Shirakawa. It’s aimed at encouraging commercial banks to lend more to high growth sectors such as energy. Loans provided under the program have already reached Y3.3 trillion, near their Y3.5 trillion ceiling. On Tuesday, the BOJ decided to double that amount to Y7 trillion. The maximum amount available for each bank will also be lifted to Y1.0 trillion from Y150 billion.

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